Carillion buys Eaga for £300m in bet on 'green home' revolution

The drive among companies to cut their fuel bills has led Carillion to buy
energy services company Eaga for £300m.

Carillion, a £1.6bn outsourcing giant, also believes it will be profitable to help companies take advantage of a raft of new "green subsidies" for technologies such as solar panels and energy efficiency.

Carillion

Carillion's share price jumped 9.4, or 2pc, to 394.6p after Eaga's board recommended the offer of 120p per share, made up of 118.79p in cash and a 1.21p dividend.

John McDonough, chief executive of Carillion, said initiatives like the Green Deal, where companies and homes will be lent money to invest in energy efficiency, are "music to the ears" of outsourcers.

He said there is great "strategic sense" in Carillion, which has thousands of clients, buying Eaga, which has the expertise in reducing bills and "greening" homes.

Carillion estimates that the UK energy services market should be worth about £20bn a year.

It also believes the energy expertise of Eaga could help it double its £500m businesses in Canada and the Middle East.

However, Eaga has struggled in recent months, warning on profits in November and making a £5m loss in the first half. It mostly works with the Government, councils and social housing, but has seen available money for energy improvements dry up because of spending cuts.

However, Mr McDonough said both corporate and government clients were still asking the company to help it reduce bills.